Qantas CEO projects continued earnings surge

Vanessa Hudson could hardly have taken the helm of Qantas Airways Ltd at a worse time. The brand was in tatters after a post-Covid spike in cancellations, delays and lost bags. Passenger frustration was at boiling point and the Sydney home of Hudson’s predecessor, Alan Joyce, had been pelted with eggs. As the crisis dragged into late 2023, lawmakers in Australia voiced the unthinkable – a possible breakup of the century-old carrier as punishment for market abuse. Eighteen months into the role, Hudson is pulling off what seemed like an improbable victory. The first-time CEO is simultaneously winning over disgruntled flyers, reporting super-sized profits and delivering knock-out returns for investors. A gauge of passenger satisfaction has almost doubled, shareholders are getting a dividend for the first time since 2019 and the stock is near a record. In a rare interview, Hudson, 55, says the numbers are no one-off. And she maintains relentless demand for flights, coupled with the biggest fleet overhaul in the airline’s history, is set to propel Qantas even further. At Australia’s largest airline, there’s no sign of the faltering consumer spending reported in recent weeks by major US carriers including Delta Air Lines Inc. According to Hudson, there’s appetite to travel at all price points, from the sub-A$100 (US$63) fares sold by budget brand Jetstar to the luxury berths on marathon Qantas services linking Perth on Australia’s west coast to London. Hudson’s confidence is premised on a multibillion-dollar order of next-generation Airbus jets that Qantas says are more reliable and efficient and far outstrip the financial returns from the older planes they’re replacing. “Earnings growth comes from investment and we are making the right investments,” Hudson last week said from Hong Kong, where she was meeting with investors after the carrier’s half-year results. “We’ll continue to see earnings grow.”<br/>